The best way to achieve this would be to reform the regulatory framework and, in addition, to make full use of the potential offered by the current regulations.

To date, no effective competition has yet developed in the letter market. Deutsche Post AG holds a de facto monopoly in the private customer sector and a dominant market position in the business customer sector, particularly because it is the only letter service provider with a nationwide delivery network. In the parcel markets, a small number of parcel service providers compete for private and business customers via their own delivery networks, although Deutsche Post AG also holds an influential market position here. Increasing digitalisation offers opportunities for greater competition and the development of new markets.

The privileges enjoyed by Deutsche Post AG under the regulatory framework – such as the exemption from value-added tax for universal services and the scope to increase postage rates regardless of cost trends – should also be phased out in the near future. The Federal Network Agency should be granted further far-reaching powers.

However, according to the Monopolies Commission, the current regulatory framework still offers scope for improved consumer and competition protection. For instance, postage increases by the dominant player in the letter post sector could be lower if the Federal Network Agency were to base the reasonable profit margin – as in previous years – on business risk rather than, as in the ‘Maßgrößen’ decision of November 2015 – on the returns of foreign postal service providers.

Furthermore, the Monopolies Commission recommends that the Federal Network Agency rely on its own regulatory data collection. It also advises the Federal Network Agency to regulate fees for partial services on an ex ante basis, to make market reporting more comprehensive and to intensify cooperation with the Federal Cartel Office.